NAFTA's Chapter 11 Makes Canada Most-Sued Country Under Free Trade Tribunals
Canada is the most-sued country under the North American Free Trade
Agreement and a majority of the disputes involve investors challenging
the country’s environmental laws, according to a new study.
The study
from the left-leaning Canadian Centre for Policy Alternatives (CCPA)
found that more than 70 per cent of claims since 2005 have been brought
against Canada, and the number of challenges under a controversial
settlement clause is rising sharply.
The investor-state dispute
settlement mechanism contained in NAFTA’s chapter 11 grants investors
the right to sue foreign governments without first pursuing legal action
in the country’s court systems, in order to protect foreign investors
from discrimination. Drafters of the 1994 treaty included the provision
to protect U.S. and Canadian investors against corruption in Mexican
courts.
Critics argue that the mechanism limits governments from
enacting policies on legitimate public concerns such as the environment
and labour or human rights, and that negotiations are often carried out
in secret.
The CCPA believes the federal government’s strong
commitment to Chapter 11 and its willingness to settle and compensate
claimants is encouraging more cases against Canada. There were 12 cases
brought against Canada from 1995 to 2005, while in the decade since
there have been 23.
